$45 Million For One Buck
As soon as he heard the new U.S. dollar coins were available at his local Charlotte (N.C.) Wal-Mart, Ron Feuer rushed out to exchange a $20 bill for a handful of the gold-colored coins. "I was one of the first," he says proudly. Feuer, an avid collector, might be more excited than most over the coin's arrival, but that may change.
Starting Mar. 6, the U.S. Mint will unleash a $45 million marketing blitz to sell the new coin to the public. "We want to get everyone talking," says U.S. Mint Director Philip N. Diehl. The mint has dubbed the coin the Golden Dollar, even though it's really a copper and brass alloy. But it might as well be gold, given the glittering launch the mint has planned.
The new dollar has its own public-relations firm, a cereal-box promotional tie-in, and even a catchy slogan: "The Golden Dollar: The Right Change for the New Millennium." Already there are about 200 million of the new coins in circulation and the mint, which projects that number will grow to 1 billion by yearend, just doubled production to keep up with demand.
SUSAN B. FLOP. Still, the mint isn't taking any chances. Its lavish advertising campaign will hit TV, radio, and the Internet. The coins are already "prizes" in Cheerios boxes and next month, mint officials plan a multi-city coin giveaway, handing out Golden Dollars in front of rail and subway stations.
It might seem like overkill. But the mint is determined not to end up with another Susan B. Anthony, the dollar coin that was introduced in 1979 and quickly flopped. The vending machine industry spent $200 million retooling its machines to accept the Anthony dollar, according to the National Automatic Merchandising Assn. (NAMA). Still, the public shunned the coin because it was often mistaken for a quarter.
Clearly, vending machine operators, including the postal service and mass transit operators, have the most riding on the new coin. NAMA estimates that the industry loses $3 billion a year when consumers try to slip a tattered bill into a vending machine to no avail. "Those are sales that would have happened" if a coin were used, says Thomas E. McMahon, vice-president of NAMA. The mint, on the other hand, didn't lose money on the Susan B. Anthony because it made the coin for only 9 cents, then transferred it to the Federal Reserve for $1. "What the Mint lost was face," says Diehl.
Some argue the wisdom of spending $45 million on an ad campaign for a coin. But in 1997, Congress ordered a new dollar coin. So the mint held focus groups, resulting in a coin depicting Sacagawea, a Native American woman and a member of the Lewis and Clark expedition. Then came the distribution deal with Wal-Mart Stores Inc. and, now, the ad blitz about to hit.
Critics think the mint has lost its bearings. Bankers, for example, feel snubbed by the Wal-Mart deal, since new coins have traditionally been theirs to release. Jerry Ursprung, vice-president of First Liberty National Bank in Liberty, Tex., says he was "caught off guard" when his local Wal-Mart had the first supply of the new dollar coins.
Others insist no amount of marketing will make the coin a success. They point out that the Canadian dollar coin, introduced in 1987, was a success because its paper counterpart was phased out. "With the dollar bill to fall back on, who needs the coin," says Donna Pope, a former director of the U.S. Mint.
Diehl argues that the right coin with the right marketing will work alongside a greenback. "This can be a `hot' product," he says. Now he just has to convince everyone out there that he's right.